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NZ Super insources Aussie infrastructure mandate
Fiona Mackenzie
Australian-based infrastructure manager CP2 (formerly known as Capital Partners) has been dropped from the New Zealand Superannuation Fund roster in favour of in-house management.
The $NZ30 billion (A$27.3 billion) will now manage in-house the approximately NZ$370 million previously held by CP2 in two separate mandates, a spokesperson for the fund said.
According to the fund’s spokesperson, the move came after CP2 sold down its share of US toll road unlisted investment fund DRIVe to TransUrban in the last quarter of the financial year for US$145 million.
“The Fund’s share in the proceeds was USD34.34 million [about NZ$55 million],” the spokesperson said. “CP2 was also managing the Fund’s A$280 million [NZ$315 million] stake in Horizon Roads (Connect East), which manages Melbourne’s East Link toll road.”
CP2 is an Australian boutique infrastructure manager co-founded by executive chair Sally Holloway in 1997. She took control of the business following the death of her husband and founder, Peter Doherty, of melanoma, in 2011.
NZ Super manages a number of investments in-house including some local equities and direct assets. For example, this August the fund took a US$75 million direct holding in US glass manufacturer, View, under its ‘expansion capital’ mission.
Similarly, NZ Super has invested directly into fuel cell manufacturer Bloom Energy, wind turbine developer Ogin and carbon recycling company LanzaTech.
In a speech to the NZ Shareholders Association this month, Fiona Mackenzie, NZ Super’s head of investments, said the fund had a preference for “direct flexible access” to assets.
The NZ Super spokesperson said the most recent decision to bring global infrastructure investing in-house “is consistent with our preferred operating model of investing as directly as possible”.
The fund’s results for the 12 months to June 30 this year, reported this month, show an after-costs, pre-NZ tax return of 14.64 per cent.
While NZ Super has experienced above-expectation returns over the last five years, Adrian Orr, chief executive, said the current period of volatility could prove challenging over the short term.
Global equity markets were off -6.49 per cent in August (outside the latest results period), which would affect NZ Super with its 80 per cent passive exposure to international shares.
“It is normal to see considerable volatility in our monthly and indeed annual returns,” Orr said in a statement. “We remain focused on our long-term strategies. As an agile and highly liquid investor, we are well positioned to manage short-term volatility, and will look to take advantage of market disruptions as they occur.”
– David Chaplin, Investment News NZ
